New look of RM, again...

There could be many reasons for the issuance of the new-look of currency. Among others, the central bank may issue a new currency in order to reduce the cost of printing money. The material and technology used for the new currency may be cheaper as compared to the old currency, thus giving the central bank higher seigniorage.

The next reason may be to reduce the problem of counterfeiting money. Over time, counterfeiters may improve their ability to imitate the currency. By introducing a new-look of currency, the central bank is like pressing a reset button to these counterfeiters. They now have to start all over again in order to fake money.

There is also a possibility that by introducing a new currency, the central bank may keep track with the actual amount of currency in circulation. With the old currency, some may not be in circulation due to a traditional saving method (under the pillow), lost or dirty etc. With the introduction of the new currency, people need to change to the new currency. Here, the central bank can up date the actual amount of currency in circulation.

The introduction of a new currency may also cause some difficulties. Some machines that handle money (e.g. parking) , may need to be up-dated. The new money that comes in equal size for all denominations may create difficulties to the blinds. The transition period to the new currency may create confusion to some people. All these are costs that are difficult to measure. It is hoped that a proper cost and benefit analysis has been undertaken before the central bank decides to introduce the new currency.